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Ivanhoe Energy Inc. (TSX:IE) announced that it is seeking protection under the Bankruptcy and Insolvency Act (BIA) by filing a notice of intention to make a proposal and may be facing bankruptcy as a result of the company’s current financial situation.
Ivanhoe Energy Inc. (TSX:IE) announced that it is seeking protection under the Bankruptcy and Insolvency Act (BIA) by filing a notice of intention to make a proposal and may be facing bankruptcy as a result of the company’s current financial situation.
As quoted in the press release:
It was determined by the company’s board of directors that as a result of the company’s current financial situation, seeking protection under the BIA would be in the best interests of the company and all of its stakeholders. While under BIA protection, the company will continue with its efforts to pursue strategic alternatives, including restructuring its existing debt obligations and pursuing the sale of assets.
Explaining the legal process of the NOI, the release stated:
A Notice of Intention is the first stage of a restructuring process under the BIA, which permits the company to pursue a restructuring of its financial affairs, through a formal Proposal process. The filing of the Notice of Intention has the effect of imposing an automatic stay of proceedings (Stay) that will protect the company and its assets from the claims of creditors and others while the company pursues this objective. The initial Stay period of 30 days can be extended to a maximum six months, during which time the company will assess its ability to present a viable Proposal to its creditors.
Speaking to stakeholders, Ivanhoe Energy commented:
The company continues to be actively engaged in discussions with various stakeholders to recapitalize the company. Strategic and financial alternatives under consideration are focused on relieving the financial burden of the company’s current debt structure and obtaining additional financing necessary to fund ongoing operations. There can be no assurance that the current process will result in a transaction or, if a transaction is undertaken, that it will be successfully concluded in a timely manner or at all. Failure by the company to achieve its financing and restructuring goals through an approved Proposal would result in the company becoming bankrupt.
Click here to read the full Ivanhoe Energy Inc. (TSX:IE) press release.